A 13-week cash-flow forecast tracks expected cash receipts and payments by week for roughly one quarter. It is detailed enough to support immediate decisions without pretending that the distant future can be predicted precisely.
Step 1: Confirm the opening cash balance. Use the amount actually available in the relevant bank and cash accounts. Separate restricted funds or overdraft availability rather than treating them as ordinary cash.
Step 2: List expected receipts by week. Start with customer invoices and realistic collection dates, not only invoice due dates. Add cash sales, deposits, grants, tax refunds, financing or other receipts only where there is a reasonable basis.
Step 3: List payments by week. Include payroll, NIS and PAYE remittances, suppliers, rent, utilities, loan payments, taxes, freight, insurance and planned capital spending. Record the week in which cash will leave.
Step 4: Calculate the weekly closing balance. Opening cash plus receipts minus payments produces the closing balance. That closing figure becomes the next week’s opening balance.
Step 5: Show assumptions. Identify uncertain receipts, exchange rates, disputed invoices and payments that can move. Use a base case and at least one downside case.
Step 6: Compare forecast with actual results every week. Replace estimates with actual receipts and payments, explain major differences and add a new thirteenth week.
Step 7: Act before the low point. Management options may include accelerating invoicing, collecting overdue accounts, changing purchasing, negotiating supplier terms, reducing stock, delaying discretionary expenditure or arranging finance.
The forecast should reconcile to actual bank information and should not double-count VAT, loans or transfers. It is a management tool, not a substitute for financial statements or professional advice.
Follow a practical seven-step process to forecast weekly business cash receipts, payments and funding gaps.
